Key Points
- Last week, crypto products received a significant inflow of $2.2 billion from institutional investors.
- The U.S. Election and the Beam Chain network upgrade proposal significantly boosted the inflow into crypto products.
CoinShares, a manager of digital assets, has reported a significant inflow into crypto products last week. Institutional investors contributed up to $2.2 billion.
Impact of U.S. Election on Crypto Inflows
The recent U.S. Election on November 5 stimulated a 15% increase in weekly cryptocurrency inflow, bringing it up to $2.2 billion from the previous week’s $1.98 billion.
According to the latest release from CoinShares on November 18, digital asset inflows have reached a new peak for the year-to-date at $33.5 billion. The assets under management (AUM) also hit a record high, reaching $138 billion.
Bitcoin and Ethereum Lead Inflows
Last week, Bitcoin (BTC) recorded the highest inflow of around $1.48 billion, accounting for 67% of the total. This was followed by Ethereum (ETH) and Solana (SOL) with inflows of $646 million and $23.9 million respectively.
The Beam Chain network upgrade proposal by Justin Drake led to an increase in Ethereum’s inflow from $157 million. Only multi-asset and Binance Coin (BNB) recorded outflows for the week.
BlackRock’s iShares Bitcoin Trust ETF (IBIT) saw the highest surge in crypto product inflow last week, with an increase of 63% or $2.1 billion. Meanwhile, other funds, including Grayscale and Fidelity, recorded outflows ranging from $8 million to $153 million.
Factors Driving Crypto Product Inflows
James Butterfill, the head of research at CoinShares, attributes the inflow into crypto products to a combination of looser monetary policy and the prospect of a Republican majority in Congress and the Presidency.
The potential for a second term for Donald Trump in the White House is seen as a positive for the cryptocurrency industry. Butterfill suggests that a Trump presidency would lead to more crypto-friendly regulations and fiscal policies.
Prominent pro-crypto personalities such as Elon Musk, Tom Emmer, and Robert F. Kennedy Jr. have been suggested as potential cabinet secretaries under Trump. Furthermore, the Bitcoin Act proposed by Republican Senator Cynthia Lummis and the Bitcoin Strategic Reserve have boosted investor confidence in cryptocurrencies.
Butterfill believes that the next four years could see an unprecedented level of institutional support, increased government interest, and broader public adoption of Bitcoin. This could further solidify Bitcoin’s place in the global financial landscape.